Designer apparel retailer Rent the Runway (NASDAQ: RENT) cratered in trading on Friday after the company’s revenues missed estimates. The e-commerce platform’s sales declined by 1% year-over-year to $75.7 million in the second quarter, falling short of Street estimates of $78.13 million.
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The company’s losses narrowed in the second quarter to -$0.40 per share versus -$0.53 per share in the same period last year. This was in line with analysts’ estimates.
RENT’s CFO, Sid Thacker, commented, “Our teams have made strong progress reducing fixed and variable costs. We believe these improvements—combined with expected changes in promotional strategies and increases in rental product acquired through non-wholesale channels—have accelerated our path to achieve free cash flow breakeven, before cash interest expense, in FY24.”
Rent the Runway updated its FY23 outlook and now expects Q3 revenues in the range of $72 million to $74 million, while adjusted EBITDA margin is likely to be between 3% and 4%. In FY23, the company has projected revenues of around $296.4 million, while the adjusted EBITDA margin is likely to be between 7% and 8%.
Analysts are bullish on RENT stock with a Strong Buy consensus rating based on five Buys and one Hold.
